Wanted: Hundreds of people to sit in a plane for 20 hours. Must be willing to pay lots of money. Claustrophobes needn’t apply.
Conceived prior to the Covid crisis, Qantas Airways Ltd.’s plan to operate the world’s longest nonstop commercial flights from southeast Australia to New York and London is being resurrected in a much-changed aviation landscape, with global carriers reeling from the pandemic and people wary about travel.
Qantas, which lost over A$22 billion ($15 billion) in revenue due to virus-related border curbs, is banking on passengers being willing to pay a premium to avoid layovers and get gargantuan journeys over and done with in one go.
But some regular fliers are balking at potentially paying 30% extra for a direct flight compared with a two-leg journey. While fares may differ by the time the flights start, a return nonstop Sydney-New York business class ticket could cost more than A$18,000 -- enough to buy a new compact car -- based on October flights listed on Kayak for the same route with a stop in Los Angeles.
And not everyone is ready to spend almost an entire day and night on a plane, especially in economy class. The “Project Sunrise” flights, which Qantas now plans to start in 2025 after the pandemic delayed their 2023 launch, will place unprecedented physical, mental and financial demands on passengers.
“There would be few circumstances where I’d be prepared to pay a hefty premium for a slightly shorter journey time,” said Nigel Lake, executive chairman of Pottinger Co., a corporate advisory business with operations straddling New York and Sydney.
Prior to Covid, Lake was a regular on Qantas flights stopping in Los Angeles, making him a strong candidate for the new ultra-long haul service. But he plans to stick with two flights to and from Sydney so he can have a shower in the airport lounge or take a walk before the second leg.
A New Era
Now that Australia has almost fully reopened, Qantas needs to win over travelers who for decades have broken their trips to the UK and parts of the US with stops in California, Texas, Southeast Asia or the Middle East.
Success could spawn a new network of nonstop services all over the world. Chief Executive Officer Alan Joyce has said the Sydney-based airline is considering flying direct to Paris, Chicago and Rio de Janeiro. The flights could ultimately add as much as A$641 million to Qantas’s market value, according to Jarden Research.
The services would also present a direct threat to travel hubs like Dubai and Singapore that made their names processing arriving passengers and shepherding them onto connecting flights.
Qantas is betting big that this is the future of long haul flying, committing this month to buying 12 Airbus SE A350 jets customized to fly the extra-long routes. The fleet could cost as much as A$3.64 billion, according to Jarden analyst Jakob Cakarnis. He had expected Qantas to initially order only five or six of the aircraft.
Qantas has said 41% of the 238 seats in the new A350s would be in first, business and premium economy, a clear sign of its target market.
Failure of the project would be more than a costly blow for Australia’s national airline. It would also be a recognition of the commercial and physical limits of air travel, and put the brakes on a jet-era aviation boom that has opened up the planet over several decades.
Joyce said this month he had “no doubt” about the commercial viability of the nonstop flights, citing the 17-hour Perth-London service, Qantas’s most profitable international route before the pandemic. Flights of this duration have become normal and Project Sunrise routes aren’t much longer, he said.
The main appeal lies in saving four hours or more in travel time, and reducing human contact at airport hubs in a post-Covid world. For decades, flying from London to Australia’s east coast has been a two-leg journey taking at least 24 hours. In 1935, it took 12 1/2 days.
Ticket Prices
Qantas has said the price difference for direct flights, at least in premium cabins, will be similar to its nonstop Perth-London route, where tickets can be more than 30% pricier than trips via Singapore or Dubai.
And it isn’t yet clear if business travel will fully rebound with executives now accustomed to conference calls. Oil prices have been consistently above $100 a barrel since March, pushing up the price of aviation fuel. Interest rates and inflation are also on the rise, eating into household and travel budgets.
The aircraft layout leaves 140 economy tickets to sell. In that cabin, there will be a small area for passengers to stretch and drink water, but only 33 inches (84 centimeters) of seat space per traveler, which is just one more than many airlines provide on short flights, according to tracking site SeatGuru.
Joshua Wall, a lifeguard on Sydney’s northern beaches who says he usually flies to New York two or three times a year, isn’t convinced by Qantas’s plan. While the idea of skipping the infamous immigration queues at Los Angeles airport is appealing, Wall suspects fares for direct flights may be beyond him.
“The idea of it is really good, but price is the major thing,” the 45-year-old said. “Qantas prices are prohibitive.”
Return Qantas economy fares to New York via Los Angeles or Dallas in October are about A$3,000, according to Kayak. Air Canada’s among others are roughly A$1,500.
Rival carriers may compete harder for economy passengers that Qantas will target with the nonstop flights, said Rico Merkert, transport professor at the University of Sydney’s business school.
“These ultra-long haul flights are designed for the premium market,” he said. “Many leisure travelers will still use the indirect flights of, say, Emirates.”
©2022 Bloomberg L.P.
